Trump Administration Moves to All-Electronic Federal Payments, Citing 20x Cost Savings and Reduced Fraud

The Trump administration issued an order requiring federal government funds to be sent electronically with few exceptions. The order ends the use of paper checks for Social Security benefits, Department of Veterans Affairs benefits, and IRS tax refunds. Paper checks will no longer be used for these federal payments.

Beneficiaries are encouraged to sign up for direct deposit or another form of digital payment. The Trump administration stated that paper checks are 16 times more likely to be lost, stolen, altered, or sent back as undeliverable than electronic payments. The Treasury Department reported that each paper check costs more than $3, which is 20 times more than electronic payments.

The Social Security Administration said the shift could save the federal government millions annually. The agency published a blog post on Tuesday announcing the transition. Paper payments were set to cease at the end of September with some exceptions.

The Social Security Administration said it intends to fully transition to electronic payments this year. Less than one percent of Social Security beneficiaries receive payments via paper checks.

Beneficiaries can sign up for direct deposit online through the Social Security website by adding bank account information. Banking institutions can share direct deposit information with the Social Security Administration. Recipients without access to banking services can receive a prepaid debit card through the Direct Express program.

Gov website. A waiver from the electronic payment requirement can be requested by calling 1-877-874-6347.